India Gold June Futures rose on May 15 tracking positive trends seen in the international spot price which was trading higher on hopes of a further US stimulus and worsening US-China relations.
The US President Donald Trump is open to negotiations on another possible stimulus bill amid the pandemic, but not the one put forward by House of Representatives Democrats, said a Reuters report quoting a White House spokeswoman.
Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement, it said.
On the Multi Commodity Exchange (MCX), June gold contracts were trading higher by 0.24 percent at Rs 46,765 per 10 gram at 09:20 hours. Silver futures were trading 1.3 percent higher at Rs 44,721 per kg.
Experts are of the view that as long as Gold holds 46,700 chances are high the precious metal could retest 47,000 per 10 gm.
Precious metals tested its crucial resistance of $1,744 per troy ounce and $16.15 per troy ounce respectively in the Comex division on Thursday.
“Downbeat US jobless claims data support prices of both the precious metals but after US president advocates for negative interest rates environment and strong dollar some profit-taking is seen at higher levels,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.
“Due to the weekend session, we expect both the precious metals will show volatility in today's session. Gold is having resistance at $1744 per troy ounce /INR 46700 only sustain above these levels could extend the rally towards $1755-1758 per troy ounce /INR 46920-47000 levels, else it will test it's support level of $1733-1724 INR 46400-46300 levels again,” he said.
Trading Strategy
Expert: Sriram Iyer, Senior Research Analyst, Reliance Securities
Precious metals ended higher on Thursday and started with gains this Friday morning supported by concerns of prolonged economic weakness and safe-haven appeal for the metal.
LBMA GOLD Spot has a Symmetrical Triangle breakout with an increase in volume activity which signifies a bullish strength in the counter. Therefore, $1723 level should hold support to continue this rally upto $1740 levels.
MCX Gold June contract on the daily chart gave a breakout of Falling Channel formation above 46370 levels indicating for further upside movement upto 46900-47300 levels.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX gold trades higher near $1743/oz after a 1.4% gain yesterday. Supporting gold is weak economic data, US-China tensions, concerns about the second wave of infections, and hopes of additional stimulus measures.
ETF inflows also show robust investor interest. However, weighing on price is firmer US dollar and recovery in the US equity market. While the overall outlook is still positive for gold, firmer US dollar and resistance near $1750/oz level might cap the gains.
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